Better but not well—that's the verdict that economist Richard Frank, Ph.D., rendered for the U.S. mental health system in a lecture at APA's 2009 annual meeting in San Francisco in May in which he provided an overview of recent trends in organization and financing of mental health services. FIG1

Though access has been expanded significantly, and treatment effectiveness has improved markedly, the financial incentives in place since the 1990s have served to "overcorrect" the system toward an overemphasis on pharmacotherapy, as opposed to psychosocial treatments, and toward primary care as opposed to specialty care.

These are the trends, Frank said, that account for most stakeholders—especially clinicians—seeing a broken and dysfunctional system even though enormous strides have been made in breaking down stigma and improving access to care.

Better But Not Well is the title of a 2006 book by Frank, published by Johns Hopkins University Press, about the evolution of the mental health system since the 1950s.

"We treat a higher percentage of people with mental disorders than at any time in U.S. history," Frank said. "Multiple effective treatments are available for most major mental disorders. And we have managed to increase access to effective offerings while claiming roughly the same share of the national income as we did in 1975. So on the face of it, there are reasons to be proud of the successes that have occurred."

But Frank presented evidence that the expansion of access to mental health care was driven by large system changes in organization and financing during the last 20 years, with strong incentives pushing care toward pharmacotherapy in the primary care setting. Reforming these imbalances will require similarly major changes; he highlighted the need to revisit the carveout model and to rethink the financial separation of specialty mental health care from the pharmacy benefit.

He also called for a new emphasis in training and continuing medical education on evidence-based psychosocial treatments.

"The economic incentives in place since 1990 directed care in new directions, and the system responded," Frank told psychiatrists at the meeting. "There is now evidence emerging that care may be underemphasizing psychosocial care. Correcting the imbalance in a cost-effective way will require important and difficult institutional changes. All of them will inflict some pain, and the pain will be widely shared."

Frank outlined the evolution of the American mental health system from its reliance in the 1960s on inpatient care and long-term psychotherapy in the outpatient setting. By the 1990s, he said, mental health financing looked more similar to that of general medical care: Medicaid and private insurance became dominant and state funds became less so, and insurance coverage for prescription drugs expanded enormously.

Especially important, managed behavioral health care companies became a dominant force in allocating scarce resources. This had the effect of reducing out-of-pocket costs for patients and dramatically reducing inpatient care.

But because behavioral health carveout companies have an incentive to move care off of their budgets and into general medical care budgets, the predominance of these companies has also pushed much mental health care into the primary care setting where pharmacotherapy—rather than psychosocial treatments—is the major form of therapy.

Moreover, the very low rates of reimbursement in state Medicaid programs have discouraged the participation of specialists, while those who do participate tend to practice only pharmacotherapy rather than more time-intensive psychosocial treatments.

Frank presented data showing the changes between 1990-1992 and 2000-2003 in the distribution of mental health care users by setting: while 27 percent of patients received their mental health care from a primary care physician in 1990, by 2000-2003 almost 41 percent did so. Interestingly, the distribution of people seeking care from psychiatrists also increased in that time period, from 19.6 percent to 25.8 percent.

"But there was no increase in the percentage of people treated by psychiatrists with psychotherapy," Frank emphasized. "It's all pharmacotherapy and very often pharmacotherapy alone."

Even more problematic was evidence Frank presented suggesting that early gains in quality have leveled off or dropped. Percentages of people receiving appropriate treatments for depression, schizophrenia, and bipolar disorder increased dramatically between 1975 and 1997.

But more recent quality data suggest that for depression, schizophrenia, and attention-deficit/hyperactivity disorder (ADHD), recommended psychosocial treatments have remained consistently low or have dipped somewhat. For instance, Florida Medicaid data show that the numbers of children identified as having ADHD but receiving no treatment has risen sharply.

"Quality of care is no longer increasing, and in some cases we may be giving up past gains," Frank said. "Psychosocial treatments have declined or remained flat at a very low level for most of the last 10 years. And this is true whether you look at psychosocial treatment as stand-alone psychotherapy, psychotherapy in combination with medications, or the psychosocial component of managing the pharmacotherapy."

So, what can be done to address the imbalances in the system?

First, Frank said the passage of the parity law is an important step.

"Implementation of parity creates new opportunities to rebalance care toward psychosocial treatments," he said. "Suddenly outpatient cost-sharing will be put in line with general medical cost-sharing and with medication management and pharmacotherapy, so the consumer is going to get a price decrease for psychosocial care that will tend to drive people back in that direction.

"We eliminate the limits for outpatient care so providers have more flexibility in dealing with particular cases," Frank said.

Frank said the relegation of specialists to doing only pharmacotherapy needs to be reconsidered. "To take the people who are most focused in our system on mental health care and say 'You are only supposed to do this one little piece' makes no sense. We need to reengineer the financial incentives so we put that expertise to work improving mental health and managing the balance between psychosocial and pharmacotherapy."

But clinicians have changes to make too. In this regard Frank strongly emphasized the movement toward evidence-based care. "We need to focus on education of providers on treatments that work," he said." Licensure and certification need to be tied to training and skill, and continuing education must be aligned with emerging evidence on what works. And clinical research needs to be focused on evidence-based psychosocial treatments that are user friendly, cost-effective, and practical to reimburse." ▪